Wealth Issue 2017: Essayhttp://www.openthemagazine.com/taxonomy/term/25953/feed
enBounce-Back Thrillshttp://www.openthemagazine.com/article/wealth-issue-2017-essay/bounce-back-thrills
<p>Wealth isn’t what it used to be. In the light of all that we’ve learnt lately of Behavioural Economics, it would seem like a goal towards which we could all do with a nice little ‘nudge’, a term for the kind of ‘soft paternalism’ advocated by Professor Richard Thaler of University of Chicago’s Booth School of Business who won this year’s Nobel prize for Economic Sciences. As a succession of studies has shown, not even on matters of money are we always the rational beings we ought to be. Left to ourselves, we often fall short on our finances, and so we should be thankful if some figure of authority or the other—say, a government—were to tweak our incentives and guide our choices towards what’s best for us. That’s what Nudge Theory says. We might, for example, be aware that self-enrichment is essentially about the ownership or creation of assets, but this calls for a nervy exercise called investment that we’re likely to put off until prodded to make our money work for us rather than simply work for our money.</p>
<p>Some of that inertia, especially in a country that has been largely agrarian for ages, could arguably be traced to how habituated many of us have been to an ill-conceived idea of wealth. To be sure, change is in the air—and has been for a few decades. Wealth as a pass-me-down treasure chest of sorts is slowly being sloughed off in favour of prosperity as an abstract aggregate of ‘value’ generated by those in the business of satisfying other people’s needs in a dynamic economy.</p>
<p>No, wealth is no longer what it used to be. Nor has it been since the moment Adam Smith’s 1776 classic, <em>The Wealth of Nations</em>, delivered its big blow to myopic notions of it. ‘The different progress of opulence in different ages and nations has given occasion to two different systems of political economy with regard to enriching the people. The one may be called the system of commerce, the other that of agriculture,’ he writes in this book. ‘That wealth consists in money, or in gold and silver, is a popular notion which naturally arises from the double function of money, as the instrument of commerce and as the measure of value. In consequence of its being the instrument of commerce, when we have money we can more readily obtain whatever else we have occasion for than by means of any other commodity. The great affair, we always find, is to get money. When that is obtained, there is no difficulty in making any subsequent purchase. In consequence of its being the measure of value, we estimate that of all other commodities by the quantity of money which they will exchange for. We say of a rich man that he is worth a great deal, and of a poor man that he is worth very little money. A frugal man, or a man eager to be rich, is said to love money; and a careless, a generous, or a profuse man, is said to be indifferent about it. To grow rich is to get money; and wealth and money, in short, are, in common language, considered as in every respect synonymous.’</p>
<p>Smith explains the fallacy of mixing up a self-perception of being well-off with what it takes for an entire economy to be. ‘A rich country, in the same manner as a rich man, is supposed to be a country abounding in money; and to heap up gold and silver in any country is supposed to be the readiest way to enrich it.’ Spaniard conquerors, for instance, would judge whether a land was worthy of conquest by how much it had in its possession by way of precious metals; the Tartars, in contrast, were far more inquisitive about the cattle population of their takeover targets. ‘Of the two, the Tartar notion [of wealth], perhaps, was the nearest to the truth,’ observes Smith. Counter-intuitive as it may sound, it exemplifies the crux of his point. Unlike bullion, cattle ranches deliver a consumable good, something of value, and since they yield returns as a matter of routine, they are to be classified as assets. ‘[T]he real wealth or poverty of the country…,’ he writes, ‘would depend altogether upon the abundance or scarcity of… consumable goods.’ He takes up several other examples as well, zooming out for a wide-angle look at what makes for the overall well-being of people, before he gets exasperated by the exercise: ‘It would be too ridiculous to go about seriously to prove that wealth does not consist in money, or in gold and silver; but in what money purchases, and is valuable only for purchasing.’</p>
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<p>Wealth is about value, not vaults. It’s the abstract stuff generated by those in the business of satisfying needs in a dynamic economy</p>
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<p>Indeed, wealth is about value, not vaults. And this, Smith argues in the rest of his book, is best generated in a market where people are free to serve their self-interest and nothing gets in the way of supply meeting demand. So long as there is competition on both sides and these two forces are kept in balance by prices going up and down openly (to deter or spur one or the other), an unseen mechanism would kick in to maximise overall welfare. Yes, his famous ‘invisible hand’.</p>
<p>This Free Market model is nothing if not elegant, even if it’s just that, a model, an approximation of reality; and it has proven useful as a tool of economic analysis despite its inadequacy under conditions of complexity that aren’t taken into account.</p>
<p>But people had barely had time enough to wrap their heads around Smith’s redefinition of wealth, when Karl Marx’s 1867 <em>Das Kapital</em> turned up to portray it as something else altogether, as a conjuror’s trick to be exposed, a grand illusion to be seen through. ‘The wealth of societies in which the capitalist mode of production prevails appears as an ‘immense collective of commodities’; the individual commodity appears as its individual form,’ goes this book’s first line, with dark hints of a conspiracy of haves against have-nots: ‘A commodity appears at first sight an extremely obvious, trivial thing. But its analysis brings out that it is a very strange thing, abounding in metaphysical subtleties and theological niceties.’ Huh? If that’s not enough to bewilder, Marx proceeds to liken business to religion. ‘There the products of the human brain appear as autonomous figures endowed with a life of their own, which enter into relations both with each other and with the human race,’ he says, ‘So it is in the world of commodities with the products of men’s hands. I call this the fetishism which attaches itself to the products of labour as soon as they are produced as commodities…’ From this extra-sensory observation, Marx somehow manages to isolate the input of labour in manufactured items as ‘surplus value’—the wealth that workers deserve but is extracted by the wealthy to get wealthier—and then launches into a lurid rant against businessmen as exploitative vampires. Comical as this caricature of wealth is, theories and practices derived from it have held sway in India for long enough to cast suspicions of <em>mala fide</em> intent on all private enterprise.</p>
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<p>It’s crucial that the entrepreneurial bug goes viral. So long as the fear of failure daunts fewer and fewer, we have cause for optimism</p>
</blockquote>
<p>No, wealth ain’t what it used to be, and sure as hell wasn’t after America won its cold war as a champion of <em>laissez faire</em> ideals against a Soviet Union whose economy collapsed so spectacularly in the late 80s that it was foolhardy not to rethink everything drawn from its command-and-control ideology. India had professed a ‘mixed economy’ since independence, but its Big Bang reforms of 1991 were clearly aimed at granting market forces a far greater role than the State in how resources would henceforth be allocated. This was part of a complex agenda that has been fulfilled only in fits and starts, for it’s never easy for a government to reduce its intervention, scale its fiscal deficit back, open up markets and cede space to private players. While India’s economy has expanded far faster since, how equitably it has happened remains admittedly hazy, even worrisome. Yet, perhaps the most significant aspect of the shift has been the signal it sent out.</p>
<p>An open economy isn’t just a matter of policy, it is also about what it envisions, and India’s adoption of the Free Market model —at least to the extent it has—represents a rescue of Smith’s view of wealth from Marx’s. That the reforms of 1991 engineered an economic revival was no surprise. Nor was the entrepreneurial effervescence they set off. Enterprise in the pursuit of profit, after all, is at the core of wealth generation in this scheme of things.</p>
<p>IF WEALTH IS taken as what <em>could be</em>, rather than what was or is, then it reconfigures an entire set of assumptions of what goes into its creation. Given how the world has been shaping up ever since the Industrial Age began yielding to an Infoyug, it’s clearer than ever that success has innovation as its guiding star. This calls for information and imagination—or some combination thereof—to assume something of an exponential role in boosting the power of labour and capital as classic commercial inputs. On the cultural plane, it would necessitate an open society. At the public policy level, India’s long-term plan needs to focus on healthcare and education so that it’s an endeavour open to all.</p>
<p>For the new paradigm to enrich us in the interim, however, what’s critical now is that the entrepreneurial bug goes viral, attracting ever larger swarms of Indians to the buzz of venturing forth into some market or the other with a business of their own. Among other things, what’s crucial here is how well they’re able to outdo the odds against their triumph. Every year, thousands of startups go bust, many of them much ballyhooed, and they watch their investment go up in smoke. Lots of them get hit hard. But some of them bounce right back, like the tennis ball of a pre-Independence poet’s metaphor. No matter what, they’re ready to start all over.</p>
<p>First principles count. So long as the fear of failure daunts fewer and fewer, we have cause for optimism. What matters far more than we commonly appreciate—and why ‘Comeback Kids’ are such an inspiration—is the resilience of entrepreneurs against adversity, the nerve to glare down anything that’s thrown their way, and the grit to go for a goal that looks laughably out of reach. As many of them testify, the very thrill of it can outweigh the payoff. Adrenaline can be addictive.</p>
<p>Such an attitude might be irrational at times, but then so is much of what we consider heroic. Wealth generation needs its heroes. And heroes need no nudge. Those who do are the rest of us, the ones who neither risk a gig of our own, nor invest much in assets created by others.</p>
<img src="http://www.openthemagazine.com/sites/default/files/styles/large/public/public%3A/Bounce-back.jpg?itok=uQK-3V9G" /><div>BY: Aresh Shirali</div><div>Node Id: 23508</div>Thu, 12 Oct 2017 14:42:31 +0000vijayopen23508 at http://www.openthemagazine.comFor Moral Capitalismhttp://www.openthemagazine.com/article/wealth-issue-2017-essay/for-moral-capitalism
<p>India’s politics is uncomfortable with the idea of wealth creation. India’s politicians are immersed in wealth creation. That is the cruel paradox at the heart of Independent India’s inability to climb to a double-digit growth trajectory. For, if any nation wishes to become prosperous in quick time, it must grow at a furious pace by continuously creating vast sums of wealth. Indian politics has stifled that ambition. Indian politicians have nearly killed it. The path to prosperity is hardly a secret; many nations in the West and East have achieved it over the last two centuries. But every country needs an enabling environment for it to happen. For most of India’s history since 1947, the political economy has provided a poor substratum. Prime Minister Modi has taken some steps to shift the ground, but it will take perseverance and reform before a long counter-productive legacy is folded away.</p>
<p>Being the dominant party at the time of independence, the Congress laid down the principles which would drive India’s economy, polity and society. Neither Gandhi nor Jawaharlal Nehru, despite the considerable divergence of their views on the economy, gave primacy to the notion of private wealth creation. While Gandhi was very focused on small-scale industry and a self-sufficient rural economy, Nehru’s economic vision was influenced by the Soviet Union in which the state and enterprises owned by it would be at the commanding heights of the economy. After two centuries of colonialism, one of which involved direct rule by the East India Company, a private capitalist enterprise, there was a general suspicion of the profit motive. BR Ambedkar may have temporarily prevailed by preventing the insertion of the word ‘socialist’ in the Constitution—he did not believe that the founders of the Republic should tie India down to one system forever—but it was the Left-wing of the Congress which dominated India for the first four decades after independence. For the dominant Congress, poverty alleviation was the main slogan. Somehow, wealth creation was not a strategy adopted for that noble end goal. That has continued till this day, when Nehru’s great-grandson is in effect the leader of the party.</p>
<p>The BJP has had less influence on the political economy of Independent India, having ruled at the Centre just once in a coalition (between 1998 and 2004) before Modi won a parliamentary majority in 2014. But now that it is the major national party, its thinking matters. The integral humanism of Deen Dayal Upadhyay, the long serving chief of the Jana Sangh in post-147 India, is the philosophical foundation of the BJP’s economic thinking. Upadhyay was critical of both socialism and capitalism, which he believed were too focused on materialism (Artha and Kama) while neglecting Dharma and Moksha, not defined as religiosity <em>per se</em> but as a set of values and a spirituality beyond the material. The BJP’s intellectual mooring does not entirely reject wealth creation even if it does not put it up front. And the traditional core constituency of the BJP has consisted of wealth creators.</p>
<p>Of course, India’s economy and indeed the global economy have evolved over time. The most damage inflicted upon the economy was when Indira Gandhi became Prime Minister and policies took a sharp turn leftward. The Congress aversion to private profit only became stronger and resulted in the nationalisation of banks, restriction of foreign investment and draconian laws restricting the size of enterprises. In 1947, India may have needed the Government to play a big role. By the 1960s, the task of wealth generation should have shifted to the private sector, which had greater capacity, as it did in many East Asian countries. However, India’s political economy went in a different direction. The word ‘Socialist’ was inserted into the Constitution.</p>
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<p>India’s boom years ought to have created a constituency of young Indians who’d have greater faith in wealth creation and free markets than earlier generations did</p>
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<p>A pernicious side effect of the shift was the introduction of a licence-quota raj which allowed some selected private entrepreneurs to flourish at the expense of efficiency and consumer interest while forming a close nexus with Government. It was the years between 1966 and 1977 that saw a culture of corruption take deep roots. India had to deal with a double whammy. Ostensibly, wealth creation and private profit were discouraged, leading to low rates of growth. However, the fostering of a small crony capitalist elite meant that capitalism would acquire a bad name. Capitalism thrives only when there are competitive free markets and not when the Government controls them tightly. But socialist India knew only two kinds of capitalism—the East India Company kind and the crony kind.</p>
<p>A decisive break from socialism took place in 1991 in the backdrop of an economic crisis. The existence of a crisis provided politics a cover for undertaking radical reforms which disturbed vested interests. The dreaded licence-quota raj was quickly dismantled for a number of industries and sectors. For the first time, private enterprise, whether domestic or foreign had the freedom to grow wings. Unfortunately, politics never changed its rhetoric. PV Narasimha Rao, India’s reformist Prime Minister, could never quite summon himself to do a Deng Xiaoping by declaring that “to be rich is glorious”. He couldn’t even make the other famous Deng proclamation, “It doesn’t matter if the cat is black or white, as long as it catches mice.” Politics would continue to reform by stealth while pretending to be socialist in public.</p>
<p>Things may have finally changed in the first decade of the 2000s when the Government of Atal Bihari Vajpayee went ahead with several bold reforms, including the privatisation of some public sector companies. This was also the period when Indian IT, led by the likes of Infosys, Wipro and HCL became world beaters without any help from the Government. No one grudged the wealth India’s IT entrepreneurs generated because it was seen as justly earned. Unfortunately, the defeat of India’s first non- socialist Government in 2004 turned the clock back. Ironically enough, the period between 2003 and 2012, which saw India’s highest ever growth of 9 per cent plus per annum, laid the seeds for a further de-legitimisation of capitalism, capitalists, politics, politicians and the wealth they had accumulated.</p>
<p>India’s boom years ought to have created a constituency of young Indians, who grew up in liberalised India, who would have a much greater faith in wealth creation and free markets than earlier generations did. However, the virulent crony capitalism that was unleashed in the boom years ended in policy paralysis and slowdown post 2012. The problem wasn’t free markets but continued government discretion in sectors like telecom, coal and other natural resources. Public-private partnerships which were mooted to solve India’s infrastructure deficit descended into a farce, with profits privatised and losses socialised. So even while a majority of Indians benefitted from high growth, the perception that too many people had acquired wealth based on a nexus with government stood out. The rich and wealthy were deemed crooked, just like the East India Company or the entrepreneurs of the 1970s. That many politicians became businessmen and <em>crorepatis</em> many times over in the post-liberalisation era also turned public perception against the manner in which the system had evolved. The scale of corruption and wealth accumulation by sundry politicians took on a whole new dimension compared with the pre-1991 era.</p>
<p>The challenge for India and India’s current leader is to separate genuine wealth creation from crony capitalism. Prime Minister Modi is trying hard. He has taken strict action against corruption and cronyism, while encouraging genuine entrepreneurship, particularly in the young generation through initiatives like Startup India. He is the first Indian leader to openly campaign on the promise of minimum government in a country where the Government has been larger than life even after 1991. Modi’s personal integrity is a great asset in his quest to convince India of the merits of honest wealth creation. Unlike many other politicians, he is not using politics as an avenue to enrich himself or his family. That gives him an unusual legitimacy and moral authority. The fact is that India cannot solve the problem of poverty or complete its quest for inclusiveness by redistributing a small cake. The size of the cake needs urgent expansion and only wealth creation can do that.</p>
<p>Modi has an intellectual anchor in his quest. Deen Dayal Upadhyay’s philosophy of integral humanism could play an important role in creating a framework for a well-functioning market economy which eschews cronyism and other types of wrongdoing while creating wealth. Integral humanism has a moral dimension which is important in a country reeling from amoral, if not immoral, capitalists.</p>
<p>Perhaps, unlike Deng Xiaoping, we should care about the colour of the cat.</p>
<img src="http://www.openthemagazine.com/sites/default/files/styles/large/public/public%3A/Themoralcapitalism.jpg?itok=JzY2uN3L" /><div>BY: Dhiraj Nayyar</div><div>Node Id: 23505</div>Thu, 12 Oct 2017 13:01:44 +0000vijayopen23505 at http://www.openthemagazine.comWhat the Perfect Portrait Does Not Sayhttp://www.openthemagazine.com/article/wealth-issue-2017-essay/what-the-perfect-portrait-does-not-say
<p>Family portraits are always perfect. In a typical portrait, the parents are seated regally, the children draped around them rather lovingly; the background is perfect, the clothing matches and the overall scene is that of peace and tranquillity. Have you ever seen a family portrait where you can actually see the temper tantrums of the kids or the disagreements of couples or a dishevelled look that we all usually carry? Just as the portrait is not a perfect representation of what really goes on in a family, media hype about entrepreneurship is not an accurate depiction. Entrepreneurship is not easy. While great thought and market opportunity are necessary conditions, they are certainly not sufficient for success. It’s an entrepreneur’s ability to keep the fire in the belly alive despite all obstacles, at all times, that separates the great from the regular. Here follow a few stories and lessons that I have learnt as an entrepreneur who has interacted widely with many others.</p>
<p><strong>The team</strong></p>
<p>The word ‘entrepreneur’ itself is rather deceiving. Since it’s French, it has a sound of elegance that, say, ‘data entry clerk’ or ‘kirana dukaanwaala’ (shopkeeper) do not possess. But please do not be dissuaded by the name. It means that you are the ‘jhadoowaala’(sweeper), ‘dukaanwaala’ (shop keeper) and ‘paisa bheekh maangne-walaa’ (one who begs for money), ma aur baap (mother and father)—all rolled into one.</p>
<p>The best ones are those who can attract the most talented people to work for them, when they have nothing to show for it. To have someone leave a guaranteed income to join the initial unknown journey is the first true test of entrepreneurship. In the late 90s, there were many search companies—Yahoo, being the largest, followed by Excite, Alta Vista, Ask Jeeves—all funded by legendary investors. This was a time when Intel was one of the most sought-after companies for employment. So imagine my surprise when a young woman in my team asked me what I would think of her leaving Intel to join a search company starting out in her garage. She was married, pregnant and had a good job at Intel. I cautioned her about her next steps, and thank goodness, she threw caution to the wind. The credit goes to the young founders, Sergey and Larry, who started Google in the face of many established companies and could convince people like Susan Wojcicki to leave her well-paying job at Intel to join their venture. It’s not just the intelligence of the entrepreneurs but their ability to build a strong ecosystem that makes them successful. To have such belief in your dream that you can attract the best talent even if they have far better options—that’s the first sign of the entrepreneur’s ability to counter common wisdom. Susan kept her sharp eye on a good deal intact and led Google’s success in advertising and major acquisitions. Currently leading YouTube, she is recognised as one of the most powerful women on the internet.</p>
<p><strong>Passion and profit</strong></p>
<p>When you say something like ‘I want to follow my passion’, your parents get a slight palpitation because this means that all the investment they made in you is now at stake. It also means that their plan of ending their financial commitment towards you with your graduation, just got a long renewal. Because ‘passion’ often—and probably always—means a profession that will not make you any money in the first few years. Then when you say ‘garage’, you mean your parents’ living room, where you fast deplete the rationing of food aided by your co-founders, team members and sundry others who drop by to support you. To be truly successful, you need to put your passion aside and see if this passion has a purpose, an audience that is willing to pay for it over and over again, and finally, the most important thing that many new-age businesses seem to have forgotten—profit potential. To stay afloat, you must be able to afford your own apartment and be able to take your parents out for dinner once in a while. And before you buy that new car to celebrate the first round of funding, you should repay your parents by buying them a nice house, sending them on a great vacation or whatever it might be, to thank them for being unquestioning investors in your life. It’s best to keep the passion as a part-time thing if it cannot professionally support you, or be willing to change your plan to suit what might actually be needed by a market. Alternately, tap into another passion of yours that might be more needed.</p>
<p>Ken Lacovara used to be a rock-and-roll drummer playing at clubs and travelling across the US. One day, he realised that this was not the path he wanted to follow and decided to pursue his other passion—palaeontology. The rest, as they say, is history. Today, he is the real-world ‘Indiana Jones’, who excavated the largest dinosaur in the world and was instrumental in Rowan University buying out a mine in New Jersey that is home to rare fossils. Soon you will see this scientist as the founder of Edelman Fossil Park of Rowan University, which could be a vacation destination for many of us. When we hosted him in India, he was happy to jam with all the musicians on stage and rock the show, and remains a world-class palaeontologist by profession. It is this ability to know which aspects of your talent could be your profession and which could be your passion that is the key to surviving the tough road ahead for any entrepreneur.</p>
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<p>Such belief in your dream that you can attract the best talent even if they have better options is the first sign of the entrepreneur’s ability to counter common wisdom</p>
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<p><strong>Angel funding</strong></p>
<p>Let this title not fool you either. Angel investors are not those beautiful people with flowing hair and wings who will magically appear to turn you into Princess Cinderella with the touch of a wand. They are the ones with tough questions; often their rejection could be a test of your faith in your idea. They are giving you part of their hard-earned money to support your dream, to get you off the ground. The best ones don’t just give you money, they open up their network for you, they take you to who you need to meet, and they support you, talk about you to the right people and make sure that your life changes because you met them.</p>
<p>When someone like Rajan Anandan of Google or Debjani Ghosh, who until recently was leading Intel India, or Saurabh Srivastava of Indian Angel Network invest in you, they are opening up one of the most powerful networks to you. The Late Rajeev Motwani, who was professor to Google’s founders, was a prolific angel investor. He would hold office hours at his university café in Palo Alto to give advice to any entrepreneur who asked for it, free of charge. If he liked them, he even gave money and often forgot about it. His wife, Asha Jadeja, keeps up that practice, with over 100 investments. She says she looks for an ability to bounce back from adversity in the entrepreneur. You know that the business plan is going to change, the market might shift, but if that entrepreneur is a go-getter, then her bets are on.</p>
<p>How persuasive you are to get that appointment with an angel investor and how clever you are about the ways in which you can get an appointment is a clear sign for the angel to know the tenacity of the entrepreneur, which is the main characteristic they think is worth investing in. One of my friends told me about how he called the investor’s office, found out that he was going on a trip, took the help of his secretary (who took pity on him after his frequent calls with a pleasant disposition) to find out the flight he was taking, and bought a business-class ticket with the money he had been saving, manoeuvred his way into a seat next to the investor, and then pitched his idea. Thankfully, the investor was in a sociable mood and talked to him. To risk all that you have to get a ‘chance’ to talk to someone without knowing the outcome is a sure sign of a resourceful entrepreneur.</p>
<p><strong>Venture capital</strong></p>
<p>When you go to a Venture Capitalist (VC), you are entering a long- term commitment, not just to try an idea, but to have it return the money with healthy multiple responsibilities to your investors. While the angel investor invests his or her personal money, the VC is investing others’ money as well. This could be money taken from sources such as pension funds, funds of funds, and high net worth individuals who trust the VC to invest large sums in multiple ventures. They are answerable for the performance of their investment portfolio. So when these investors question you, suggest you to do something that you might not want to do—or even worse, ask you to leave—they are doing so because they are accountable for the money that they gave your company. Receiving the first cent from outside is an agreement to give up control and do something that is focused on the company and not on any individual.</p>
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<p>Angel Investor Asha Jadeja, who has over 100 investments, says that she looks for an ability to bounce back from adversity in the entrepreneur</p>
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<p>Vani Kola is one of the most successful Venture Capitalists in India and I asked her what she looks for in an entrepreneur before she puts in money. She said that she looks for certain leadership qualities that are often untested in a first-time entrepreneur. What she looks for is clarity of thought, an ability to manage different opinions and yet build a consensus, and most importantly, openness to feedback. I had an opportunity to witness what she means with Ashish Goel, founder of Urban Ladder. One of my product designer friends was visiting and he had a major disagreement with the approach Urban Ladder was taking. I let Ashish know about it and instead of ignoring it, he wanted to meet my friend and understand his point of view. I hosted both of them in my living room and over chai and snacks. Each expressed their positions and had a very passionate and healthy discussion. I don’t think either of them changed their point of view, but they agreed to disagree. It is this ability to take the time to listen to differing opinions that can keep his thought process current and give him an edge in his business.</p>
<p><strong>Board of directors</strong></p>
<p>One of the most important steps in an entrepreneur’s journey is putting together the Board of Directors. While investors have a negotiated seat at the table, it is important to bring diversity of thought to it. One of the most important aspects is to ensure gender diversity in the boardroom. Anjali Bansal, who was the MD of TPG Private Equity and led Spencer Stuart’s India practice, is a champion of bringing more women in. To her, it’s not just an idea but an essential ingredient of success. She spends much of her personal time volunteering at FICCI and other organisations to get women on corporate boards.</p>
<p>It’s also important to have experience diversity. While young turks can think out of the box, a seasoned executive is needed to coach and cultivate opportunities. Google brought in Eric Schmidt as CEO, Facebook brought in Sheryl Sandburg as COO, Airbnb had expert hotelier Chip Conley as its consultant for the first few years, Phani of Red Bus had strong board members like Raju Reddy; the list goes on. The key to growing from a medium to a large company is to be brutally honest in recognising areas that the entrepreneur is not good at and bringing in the best people and giving them the freedom to take the company to the next level. The ancient adage of ‘stoop to conquer’ is an important aspect for success. The true longevity of the entrepreneur depends on what he or she is willing to give up to grow.</p>
<p><strong>Sell out or go on?</strong></p>
<p>Once your company gets the traction and starts doing well, there comes a time when you need to make a decision whether to sell out or go for an IPO. When an offer comes to buy you out, it’s a very emotional period not just for the entrepreneur but also for the whole team. When I asked Phanindra Sama, founder of Red Bus, if he regretted selling his company instead of waiting for an IPO, he was clear in his perspective. He said that he was happy to buy his personal freedom. Since selling, he has taken the time to attend a diverse set of courses from psychology to sociology and delve into a few technologies at institutions around the world to add to his learning. He also started a sandbox along with his investor, Raju Reddy, in their native place of Nizamabad to nurture growth in the region through entrepreneurship.</p>
<p>Sometimes stepping away gives you an opportunity to take a new direction and offers the space to exercise another aspect of your talent.</p>
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<p>Andy Grove told me he rated himself B+ as a CEO. A leader’s goal, he reasoned, was not just current success but to prepare a company for it after his departure</p>
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<p><strong>The long road to success</strong></p>
<p>When we read about an Olympic win, an IPO or eradicating a major epidemic, the road is long, hard and unfathomable for years. It’s probably not an exaggeration to say that at least over a billion Indians know about the Olympic medal that PV Sindhu won. While Pullela Gopichand became a household name across the globe when his student Sindhu took the silver medal at the Olympics in 2016, it was not easy when he started his academy in 2001. There was a moment when all the corporates turned him down; as a family, they decided to sell the house to sustain the building of the institute. Eventually, they did not sell the house but took a mortgage on it and continued without having to go to a corporate house. He said that it gave him renewed strength and determination to succeed because his family had faith in him. It’s that obsessive belief that you are going to succeed when nothing seems to work which is a must for every endeavour. I believe that results ought to be measured every decade and not every quarter to make a meaningful progress.</p>
<p><strong>Growth</strong></p>
<p>While starting something from the ground up is exciting, increasing what you have is equally important. As a 28-year-old taking over a $1.6-billion business after the sudden demise of his father, Kumar Mangalam Birla grew the business 26-fold to jump to over $40 billion in two decades. After pursuing his passion for filmmaking at Harvard, starting as a management trainee under the guidance of his father and uncle, Anand Mahindra raised a multi- billion dollar business. Both of them took what was given to them and made it much larger and diverse under their leadership, by bringing in professional help and delegating authority. It is important to bring the right level of leadership at the right time for a company to reach its potential. For an entrepreneur, the company is like a baby. Like all good parents who need to let their children leave the nest to fly on their own, an entrepreneur needs to bring in the right help at the right time to let go of being the sole decision maker.</p>
<p><strong>A legacy that lasts long after you leave</strong></p>
<p>Finally, we come to the one thing that differentiates building a company for a few years versus an institution that can last for decades, even centuries. Intel has been around for almost 50 years and Andy Grove has been the COO, CEO or chairman for over 25 years. Under his leadership, the company’s market capitalisation grew from $4 billion to $197 billion, and the brand went from being a mere chip maker to one of the world top 10 brands. I interviewed Andy a few years after he retired as chairman. Andy is my personal hero and I always rated him as an A+ leader. When I asked him what grade he gave himself as a CEO, he said B+. That answer surprised me but his reasoning was that the role of a CEO was not only to make the company successful, but also to spend enough time outside the day-to-day business to watch trends and prepare the company to be successful much after the leader leaves. He felt that he was too busy with running the business and did not see far enough to make Intel keep up its exponential growth after his leadership. To this day, his clarity of thought and his ability to grade everything with utmost objectivity inspire me and make him an iconic leader across the globe. Be it a financial wizard in the entertainment space like Herb Allen or business icon like Steve Jobs or prolific investor like Ben Horowitz or a young leader like Mark Zuckerberg—they sought Andy’s inputs till he passed on. It is that ability to put the larger purpose ahead of any personal bias that ought to be valued by every entrepreneur who wants to stand the test of time.</p>
<p>Being an entrepreneur is not just about valuations and a personal bank balance, it is about learning constantly, evolving and keeping up with the times. It is about surrounding yourself with people who are smarter than you, whether you agree with them or not. Intel and Apple had the most diametrically opposite philosophies. Intel went for an open architecture while Apple went for closed. Andy Grove and Steve Jobs famously disagreed on their approaches. And yet, those of us at Intel’s headquarters in Santa Clara would often feast our eyes when the lanky blue jeans and black turtle neck clad young man stood in the cafeteria line along with Andy and would strain our ears to listen to their conversation. They were archrivals that took the time to keep in touch and exchange ideas.</p>
<p>As an entrepreneur, after you go through all the above-mentioned stages, after making a million mistakes, turns and pivots, you will get your perfect portrait to hang on your wall. As you watch those portraits, remember the tough journey that preceded that perfection. I have yet to know a successful entrepreneur who has not felt lonely, lost and hopeless at some point in their career. They stand where they are today because they kept moving forward with a lot of help till success chased them.</p>
<p>Remember, the goal is not to win with no glitches; it is to get up faster every time you fall, without losing momentum. Here is to surviving all the bruises, hurts, rejections and setbacks, after which you may have a story to tell about your entrepreneurial journey and a pretty picture to hang on your wall.</p>
<img src="http://www.openthemagazine.com/sites/default/files/styles/large/public/public%3A/Entrepreneur.jpg?itok=vMiYdpic" /><div>BY: Lakshmi Pratury</div><div>Node Id: 23497</div>Thu, 12 Oct 2017 08:52:30 +0000vijayopen23497 at http://www.openthemagazine.comThe Gold and the Beautifulhttp://www.openthemagazine.com/article/wealth-issue-2017-essay/the-gold-and-the-beautiful
<p>When we think about wealth in the epics, what comes immediately to mind is hyperbole. Kings and princes have hundreds of thousands of horses and slaves, their coins and jewels are as numerous as the drops of water in the ocean, their granaries are filled with thousands of tonnes of wheat and rice, their millions of cows provide hundreds of gallons of milk, and so on. The typically elevated register of the epics ensures that everything is larger than life, nothing more so than wealth. And we read and receive these extraordinary numbers with ease, knowing that these details are just an amplification of the idea that kings were very very very rich. As a specific example, here’s a list of some of the things that Yudhishthira of the Mahabharata stakes and loses in the dice game with his cousins: a superb pearl necklace, set in the best of gold, born from the swirling ocean; one hundred jars, each of them filled with a thousand gold pieces; an opulent chariot drawn by eight perfect horses; a thousand rutting elephants, richly decorated and invincible in battle; a hundred thousand slave girls, all young and beautiful, decked in fine clothes and beautiful ornaments and skilled in the sixty-four arts; an equal number of men, also well-attired and trained to serve; many gold-decorated chariots with trained horses with golden trimmings; countless ordinary chariots and horses and carts surrounded by beasts of burden of many kinds; hundreds of warriors who are each paid a thousand gold coins a month as wages; from each of the divisions of society, sixty thousand men who are broad-chested, and live on milk and rice and grain; four hundred boxes, reinforced with copper and iron, each filled with five hundred buckets of beaten gold; uncountable riches—millions and billions and trillions, as many as there are drops in the ocean; innumerable sheep, cows, cattle, horses and goats. In the Valmiki Ramayana, the gifts that Rama showers on the kings who had come to attend his coronation are equally outrageous in terms of quality and quantity. Teams of horses and retainers are required to carry the gold and jewels and clothes to the kingdoms to which they have been gifted.</p>
<p>However, it is in Lanka, Ravana’s island citadel, that the Ramayana pulls out all the stops in terms of how wealth and luxury can be described. In the Sundara Kanda, we see Ravana’s living quarters through the eyes of Hanuman, and like him, we are stunned by their opulence and luxury. Hanuman is no stranger to comfort—the monkeys lived a life of abundance and pleasure in Kishkindha. Their streets were redolent with the fragrance of natural liquors, their beds were soft, their women voluptuous. But what Hanuman sees in Lanka is well beyond anything that he might have imagined—pillars of gold and silver that were well proportioned and carved from top to bottom, golden lattice work over the windows, stairs studded with glowing gems such as sapphire and emerald, crystal floors inlaid with pearls, ivory and coral, richly embroidered carpets, couches covered with silks and brocades and strewn with cushions as soft as clouds. The air was heavy with the smell of rich foods and sweet wines which were piled high on tables that groaned under their weight. Even the ramparts of the city were made of precious metals and the gates were decorated with pearls and lapis and diamonds.</p>
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<p>When we consider the ways in which epics talk of wealth, the world they depict is the world of kings and warriors, where both power and money are important values</p>
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<p>Furthermore, there are countless numbers of women in Ravana’s chambers, each more beautiful than the one before, each adorned with jewelled ornaments, each wearing clothes made of the finest and most delicate fabric. As they lie spent after a night of pleasure, their girdles have snapped, their ornaments are askew, ‘pearl necklaces gleaming like moonlight lie between their breasts like sleeping swans’, their earrings glitter and quiver gently as they breathe softly in their sleep. These women also represent Ravana’s wealth, they are part of the opulence of his city and his realm.</p>
<p>Ashvaghosha’s ‘Buddhacarita’ tells the story of the life of Gautama Buddha but resembles the Hindu epics in its tone and texture. Here, too, we have a prince who leaves the lush life of his palace and goes far away into the wilderness. Of course, prince Gautama is not exiled, he chooses to renounce his life of luxury and indolence to find answers to the questions that torment him. Unlike Rama and Yudhishthira, Gautama never returns to reclaim his kingdom. Instead of becoming an emperor, he becomes the ‘turner of the wheel’ of dharma, fulfilling his prophesied destiny as a chakravarti. In Kapilavastu, where Gautama is born, there are thousands upon thousands of richly caparisoned horses and elephants with golden trappings, there are as many milch cows, there are chariots and trunks loaded with gold and silver and others stuffed with gems. As in Ravana’s Lanka, Gautama’s chambers are filled with beautiful women, adorned with jewels. They are an essential part of the atmosphere of wealth and luxury in which the young prince is brought up. As the prince turns away from all the palace has to offer, his father hopes that the seductive charms of these beautiful creatures will keep Gautama chained to the city and committed to his life as the king-in-waiting.</p>
<p>Despite what we read, the epics are not entirely comfortable with such displays of ostentation. As we experience the dice game, we are not impressed by how much Yudhishthira has to give away. Rather, we are disturbed by his profligacy, his wastefulness, his compulsive behaviour. In the Ramayana, we are persuaded that Ayodhya is prosperous rather than wealthy; there is a restraint about the city and the family that rules it. Kishkindha and Lanka display an excess that is observed rather than celebrated. Lakshmana in Kishkindha and Hanuman in Lanka are outsiders, looking in, as if through a window. We do not get the sense that they want to enter the picture that is on display in front of them.</p>
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<p>It is in Lanka that the Ramayana pulls out all the stops in terms of how luxury can be described. Even the ramparts were made of precious metals</p>
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<p>The opulence of royal courts and prosperous cities is contrasted in the epics not by depictions of poverty but by ascetic vows and practices. It is the forest that lies in opposition to the city and the simplicity of life there provides a challenge as well as a counter- point to urban lives and ways. There is a delightful moment in the Bala Kanda of Valmiki’s Ramayana when the Rishyashringa, a young sage who has been entirely brought up in the forest, has to be persuaded to come into the city. Lovely women from the city are sent to entice him and they bring him sweets and other delicacies. The poor young sage has never seen women before and so he is not entirely sure what kind of creatures stand before him, more fragrant than flowers, more sweet-voiced than birds. He is convinced that the sweets they feed him are simply fruits from a tree that he has never seen. Utterly entranced, he follows them to Ayodhya where he eventually performs the sacrifice that gives Dasharatha his sons.</p>
<p>When Rama, Sita and Lakshmana go into exile, the first thing they do is relinquish their finery—their silk garments, their jewellery and their ornaments. We are told that they changed into ‘clothes of bark’. Whether or not the clothes were actually made from the barks of trees, we can be sure that the garments are rough and basic. On the night before they enter the forest, Rama asks the Nishada, Guha, to teach him how to mat his hair with the sap of the fig tree. Later, as they settle in to their forest exile, Sita’s jewels are replaced by garlands of flowers. Although the princes and Sita adopted many of the ways and the habits of forest dwellers and ascetics, Rama and Lakshmana never relinquish their weapons, holding on to one last thing that ties them to their previous identities.</p>
<p>The Pandavas, too, have to spend thirteen years in the forest after Yudhishthira loses the second dicing match. Draupadi is not at all pleased with the change in their circumstance just after they had established themselves in Indraprastha, a city that rivalled the Kaurava capital, Hastinapura. She is angry that her husbands have been stripped not only of their clothes but of all their royal comforts and privileges. Unlike Sita, Draupadi seethes with humiliation and resentment, finding no joy in the uncluttered life of the forest with its simple food and basic lodging. While Rama and Lakshmana’s matted locks in the forest point to their temporary renunciation of their Kshatriya roles, Draupadi’s unbound hair also points to the renunciation implied by life in the forest.</p>
<p>When we consider the ways in which epics talk of wealth, we must remember that the world they depict is, in the final analysis, the world of kings and warriors, where both power and money are important values. Artha is the basis of the Kshatriya’s life and while it may not be the ultimate value, it is what compels and propels his actions most of the time. However, because artha is not the only value, the epics show us the opposite in the forest, in a place and a life where wealth and power are made irrelevant, if not entirely rejected. Prince Gautama never returns to the royal life into which he has been born, and even though Rama and Yudhishthira return from the forest and reclaim their patrimonies, they never pursue power in the same way again. It is as if their time in the forest has shown them that artha has a necessary place in the life of a ruler but that it cannot be the only thing that drives him. After the ghastly war with his cousins, Yudhishthira tries desperately to renounce his kingship and step away from both wealth and power. Rama’s reign in Ayodhya is largely passive—he spends his time surrounded by Brahmins, listening to stories they tell him. Neither is happy as king, the forest has taught them that there is another way to be. In their exile, away from the seductions and compulsions of artha, Rama and Yudhishthira have learned to moderate their ambitions, allowing them to occupy their designated places in the world without aggression and without greed. They know that the righteousness any and every king should aspire to is the judicious use of both the power and the wealth that he commands.</p>
<img src="http://www.openthemagazine.com/sites/default/files/styles/large/public/public%3A/Thegold1.jpg?itok=V3jdSOGo" /><div>BY: Arshia Sattar</div><div>Node Id: 23493</div>Thu, 12 Oct 2017 08:06:21 +0000vijayopen23493 at http://www.openthemagazine.com